Workers Compensation Chapter 7 Accident Prevention Manual Administration

Workers Compensation Chapter 7 Accident Prevention Manual: Administration & Programs

The System n To ensure that losses from workplace injury are compensated. n A “safety net” to alleviate the problems that workplace injuries can cause, while providing employers some relative predictability of the costs. n In return for the protection, workers cannot sue their employer for their injury.

Economic Losses n 1. Loss of earnings. n 2. Additional expenses. n Death- worker’s survivors would be compensated for their providers loss. n Total and Permanent Disability- may be even greater costs than a death.

WC in the United States n Early interest in the German (1893) and British systems (1897). n 1902 - Maryland “Cooperative Accident Insurance Fund”. n 1908 - FDR pushed for, and got compensation for Federal employees.

Early Laws n 1909 - Montana law for miners and laborers in coal. Declared unconstitutional, but got other states thinking about compensation for workers. n 1910 - New York for certain hazardous jobs. n None of the early laws included occupational disease- “injury by accident”.

Early Laws n Every state (except Oregon) required waiting periods of one to two weeks before benefits were paid. Some provided retroactive payments after a prescribed period. n 1911 - Wisconsin WC law was the first to remain effective and was soon followed by Nevada, New Jersey, California and Washington.

Early Laws n 1916 - the United States Supreme Court declared workers compensation laws to be constitutional. n Workers compensation was not provided in every state until Mississippi enacted its first law in 1948.

Compensation Legislation n All 50 states, DC, Guam and Puerto Rico, plus Federal Employees Compensation Act (FECA) and the Longshoreman’s and Harbor Workers Act. n While there have been increases in benefits and scope, the basic concepts have remained unchanged.

Objectives of WC n Six basic objectives- Page 151. n Income Replacement. n Medical and vocational rehabilitation. n Incentives for both the company and injured persons to get back to work ASAP. n Accident prevention and Reduction?

Major Characteristics n Compulsory n Elective n If you reject the act you would lose the “common law” defenses: – Assumption of risk – Negligence of fellow employees – Contributory negligence

Major Characteristics n Most jurisdictions require employers to obtain insurance or prove financial ability to carry their own risk. n “Self-Insurers” n Some states (13) permit employers to purchase insurance from either a competitive state fund or from a private insurance company.

Covered Employment n Many laws exempt employers having fewer than a specified number of employees-usually 3 or 4 in any one location. n Other exemptions. n Federal Employer’s Liability Act.

Limitations on Coverage n Each state act was the result of political compromise. n These laws would introduce greater certainty into the calculation and payment of benefits- in contrast to the common law system: – Could sue under common law – If you lost, you got zero

Limitations of Coverage n Two factors usually prompt compensation litigation: n 1. Work relatedness- did the injury arise out of the course of employment? n 2. Extent of the disability.

“Exclusive Remedy” n “Quid Pro Quo”- employers accept the responsibility for injuries without regard to fault. n In exchange, employees give up the right to sue for unlimited damages. n However, workers may bring suit for negligent actions on their employer, fellow workers, contractor, entity or other individual.

Broadening Exclusive Remedy n The expansion of Dual Capacity Doctrine- if the injury was caused by the employers product or a service available to the public. n Intentional Tort.

Covered Injuries n “Arising out of and in the course of employment. n Four Tests: – Personal injury – By accident – Arising out of – In the course of

Occupational Disease Originally not part of WC. n Most states do not provide for “ordinary diseases of life”. - See 1996 Virginia State Supreme Court ruling on page 154. n Compensation for Occupational Disease is the same, however, some states do not provide permanent partial disability for certain diseases. n Most states have extended periods for reporting latent, slowly developing diseases. n

Work Related Impairment n Hearing n Black Lung Disease

Work Related Impairment n “In the course of employment” – means from the time they step on the employer’s premises until the time they leave it. n Not easy to define. What is meant by premises? n “Arising out of” – causal relationship between the employment and the injury. (ie, heart attack)

Work Related Impairment n Actual Risk Doctrine- the hazard resulting in injury be a risk of the particular employment regardless of whether it is a risk to which the general public is exposed. n Positional Risk Doctrine- the “but for” test. The employment places the worker in a position where he/she is injured.

Benefits n TYPES: Loss income, medical payments and rehabilitation. n 70% for “temporary total disability” n Only 25% of such cases were for cash benefits paid. n Benefits for “permanent partial disabilities” accounted for 66% of the total dollar amount.

Benefits n Benefits are payable as a wagerelated benefit. n Varies by state. Between 66% and 100% of current wages. n Some can get less than two-thirds of their pay because of ceilings. n Tax free.

Benefits n Maximum time periods for receiving benefits. n Waiting period, usually 3 -7 daysapplies to only cash indemnity payments. n Retroactive payment varies from state to state.

Benefits n Will vary depending on whether the disability is temporary or permanent, partial or fatal. n Dollar ceilings may mean individuals are not fully compensated for lost earnings. n Permanent total disability- prevent any work in the labor market and are of an indefinite duration.

Benefits n Permanent Partial Disabilitycalculated on a relatively complex basis: – Scheduled Injuries • % of average weekly wages • Paid for fixed period • Vary according to type and severity – Non-scheduled injuries • General nature, back and head injuries

Benefits n Death benefits: – Income replacement for families – Burial benefits

Medical Benefits n Compromise 1/3 benefits: – First Aid – Physician services – Surgical and hospital services – Nursing and drugs – Prosthetic devices

Medical Benefits n Medical benefits required in all states n ½ States have the right to choose physician. n Social Security benefits. n Private Disability Insurance

Rehabilitation n One of the primary objectives of WC. n Restore workers to fullest economic capacity. n Benefits are paid (sometimes in addition) for training, education, testing and services to get the injured back to work. n Federal Vocational Rehabilitation Act

Administration n State agencies handle cases and ensure that all parties comply with the law. n Worker rights under the law.

Handling Cases n Uncontested – Direct Payment – Agreement System n Contested Cases: – Hearing by referee or hearing officer. – Appeals.

Rehabilitation n Medical Rehabilitation: – Treat the impairment and restore lost function. – Medical care. n Vocational Rehabilitation: – Prepare for new occupation or continuing in an old one. – Retraining.

Degree of Disability n Temporary Total and Partial Disability. n Permanent Partial Disability: – Whole Person Theory – Wage Loss Theory – Loss of Wage Earning Capacity Theory – Combinations

Degree of Disability n Permanent Total Disability. n Insurance Incentives. n Safety Incentives.

Managing a WC Program n Hiring n First Report of Accident n Doctors and Medical Institutions n Rehabilitation n Follow-up